Unit 2 - Gross Domestic Product

National Income Accounting:
Economist collect statistics on production, income, investment and savings.

Gross Domestic Product (GDP):
It is the most important measure of economic growth, it represents the well being of the domestic economy of a country. It's the total dollar value of all final goods and services produced in that country within a year.

Gross National Product (GNP):
Total value of all final goods and services by citizens of that country on its land or foreign land.

What is included in GDP counting:
-Consumption (take about 67%)
-Gross Private Domestic Investment (construction of housing, factory equipment, unsold inventory of products built in a year)
-Government spending
-Net exports

What is NOT included in GDP counting:
-Intermediate goods (parts of final goods)
-Secondhand or used goods
-Non-market activities (illegal drugs, babysitting, volunteer)
-Financial transaction  (stock, bonds, real estate)
-Gifts (scholarship)
-Transfer payment